Tag Archives: procurement collaboration

Who does procurement better – the public or private sector? Is there any reason we all can’t do better together through sharing knowledge and experience? Much depends on the professionals involved.

You could argue that an uneasy relationship exists between procurement in the public and private sectors. On one side, there is full accountability and audit trails, scrutiny over every penny/cent spent and the need for what is, from the outside at least, an almost impenetrable set of regulations and documents that have to be completed.

On the other side, it’s just as accountable and auditable, but there’s more freedom in the process, things happen quicker and there’s more time for the good stuff like contract management. I think it’s fairly obvious which is which…

Accept What We Cannot Change

To stop this becoming a lengthy piece on which is ‘better’, public or private sector procurement, it’s important to separate what could be done better from what we cannot change.

Regulation and Legislation

Yes, the public sector is highly constrained by regulations, leaving it more inflexible and giving less freedom in the process to procurement professionals. But beyond getting better at working within the regulations, there’s not much to be done about it. Even post-Brexit, there will still be substantial regulation governing procurement and procurement process, even if it looks slightly different to what it is now.

Budgets

Yes, budgets in the public sector are being squeezed. Hard. But no, this is not going to change any time soon. What both the public and private sectors need to do is be savvier with how the available money is spent and how they can maximise what they get from a contract with less money to spend.

Transparency

Let’s knock this one on the head straight away. Public sector procurement receives the level of scrutiny it does as it is spending the general public’s money. To ensure everything is above board and audited this needs to continue. And the private sector will only face increased scrutiny in the coming years, so there’s no escaping on either side of the fence.

Lend a Helping Hand

However, there’s nothing to say that the public-private relationship can’t be better. Both sides could teach each other a thing or two about the procurement process and how to make it better or more efficient. After all, at a time of squeezed budgets and regulatory pressure (not to mention Brexit and trade wars), why wouldn’t we all want to work together to make our lives and jobs easier?!

In this article, we’ll be looking at three key areas in which the private sector can help the public sector and at some point in the near future, we’ll look at this from the other side.

Some of this is based on what has been written about both sectors in the press and in thought leadership papers. The rest of my advice, to paraphrase Mary Schmich and Baz Luhrmann, has no basis more reliable than my own meandering experience. I will dispense this advice now…

Negotiation

In the private sector, procurement professionals have the opportunity to negotiate at any stage in the process. Indeed, they may even choose to negotiate at multiple stages in order to get the best deal. Opportunities are more limited in the public sector, meaning more contracts are awarded without negotiation, or negotiation at a stage where the deal is almost done.

However, even these could be maximised to produce a better deal and this is where private sector professionals could help. Who better to assist with a negotiation than someone who is practised, skilled and used to carrying out the process? Swapping notes on good negotiation techniques and where savings have been found in contracts for similar goods or services could provide some much needed wins.

Longer Contracts and Relationship Management

You know the score – you spend months painstakingly putting a contract together and awarding it, only to come back to the same contract 18 months later to tender again. The limiting factor here is the length of public sector contracts in many cases, but could this be a valuable knowledge sharing opportunity?

Crafting long-term contracts, aimed at longer than 5 years (for the right goods, services or works), is a skill. Maintaining the right balance between getting a good deal on both sides, opening up avenues for innovation, while at the same time knowing that come year 5 any prices are still competitive, is something that the private sector has greater experience with. By putting heads together, this could also be passed into the public sector.

A Strategic, Value-Adding Profession

Are you in a senior management or executive level role in procurement? What do you think your organisation views procurement as – a tender machine for purchasing or a strategic partner for adding value? Some argue that in the public sector, the former is much more common. When there are savings to be made, procurement is the one tasked with delivering, but is left out of the loop when it comes to bringing the value to the top line.

Leaders can help drive a change in this view. If private sector procurement leaders have been able to make this leap already, then using a tried and tested approach may help gain the necessary traction in the public sector.

Share Your Thoughts

These are my thoughts on what the private sector has to offer the public sector in the overall procurement process. None of them represents a quick fix in terms of greater efficiency or costs savings, but done properly, could provide these benefits in the long run.

It would be interesting to hear from professionals on both sides of the fence on this too. Would you be willing to work closely with the public/private sector? How would you facilitate this? Are there other areas you think you could help with, or have greater priority? Let’s get the conversation started – you never know where it’s going to take you and the profession.

If your procurement job is making you feel like you’re stuck in a Bad Romance you need to make like Lady Gaga! Embracing collaboration will have you on The Edge of Glory in no time!

Matteo Chinellato/Shutterstock.com

When you think of great, inspiring role models for the procurement profession, pop-music superstar Lady Gaga might not be the first person who springs to mind. But just hear us out… (if you can get the tune to Poker Face out of your head!)

At last week’s Ivalua NOW conference in London, Peter Smith, Managing Director – Spend Matters UK/Europe argued that Lady Gaga is the perfect model for CPOs and procurement leaders across the globe, and not just because of her wildly catchy tunes!

Rolling Stones vs Lady Gaga

Flashback to the 1960s/70s and imagine you’re Mick Jagger going out on tour with the rest of the Rolling Stones, Peter proposes. You’re part of a pretty small team. You might be playing the biggest venues and drawing in the biggest crowds but you’re out there on stage with only your bandmates and perhaps a small supporting crew.

Fast forward to the noughties and Lady Gaga is ruling the music scene, and under very different circumstances. A global Lady Gaga tour might recruit hundreds of people. There’ll be choreographers, dancers, backing singers, caterers, tech team, musicians, management, merchandise sellers…the list is endless.

A one-woman show is actually a team effort, a collaboration, with the star herself at its helm. She’s the leader, the strategist who must pull everyone together, in true gig economy style, to deliver the spectacular that’s expected of her.

If we look at the American music charts today, over 50 per cent of the top ten entries are collaborations and, in the UK Top 10, 7 entries are collaborations.

Artists have realised that 2 + 2 can equal 5.

Procurement needs to start thinking this way. Think about how Lady Gaga puts on her show. Think about how collaboration can deliver real value for your team and the wider organisation. By bringing together the suppliers, the engineers, the solution providers and the data experts, procurement can deliver a whole lot more.

Every industry is being shaped by digitisation and the rapid change in today’s world. Given that new sources of risk and competition are emerging all the time procurement needs every hand on deck!

Improving the bottom line with collaboration

Hemant Gupta, CFO & Head Commercial, Legal & Secretarial Blackberrys knows a thing or two about the benefits of collaboration.

Blackberrys, now a leading menswear brand in India has endured its fair share of supply chain struggles in recent years.

Hemant admits, during his keynote at Ivalua Now, that sourcing has been “a very tricky subject for Blackberrys” and their efforts to drive margin improvement and competitive advantage has been a journey.

Only a few years ago, Blackberrys still employed very traditional methods of sourcing. They had no visibility, no transparency and no way of maintaining a centralised system for their data. “Searching the vendor database for sourcing to look at our historic pricing was not possible.”

“The consumer is not brand-loyal any more. They just want the best price, which is increasing demands on the retailer – our discounting has increased by 25 per cent. As CFO I need to improve the bottom line and improve our sourcing process.”

“cost cutting is no longer the solution to sustainable profitability, the key to success is finding creative ways to optimize it” he asserted.

With the help of Ivalua, Blackberrys were able to start their transformation journey, which did face some resistance from employees at first. “People are always skeptical about new processes so collaboration is key,” Hemant explained.

But within a couple of years Blackberrys data started to improve with the involvement of internal customers and they began to automate some processes. They had improved control and transparency and benefited from lower risk and increased efficiency.

4 tips to make your sourcing transformation a success

It’s human nature to think whatever we are doing, we are doing it right. You have to train yourself to change that.

2. Collaboration is key

Resistance to change is normal but you need 100 per cent commitment from leadership and strong champion. You also need to ensure you’re pulling all of your procurement resources – teamwork is dream work!

3. Identified -> Realised savings!

It’s imperative to follow through post sourcing processes.

4. Make it a lifestyle

eSourcing is not just about saving cost but cost avoidance and transparency – compliance.

Ivalua Now, The Voice of Procurement is coming to Paris on 29th March and New York on 17th May. Find out more here.

When you change from seeing your top suppliers as competitors to enablers, and take a collaborative approach, how you negotiate with them will change dramatically.

This article was written by Sarovar Agarwal, Partner, Communications Media and Technology Practice at A.T. Kearney.

Procurement leaders are facing more pressure than ever in the current business environment. In the wake of prevailing disruption and increased competition from nimble technology-focused companies, the c-suite have become eager to see procurement leaders make their function deliver more and add value to the organisation.

However, the 2016 Return on Supply Management Assets (ROSMA) Performance Check Study, “What Good Looks Like,” released by A.T. Kearney at the end of last year found that only 15 to 20 percent of procurement functions deliver high value to their organisations.

The study revealed that there is a top-tier of standout performers, a middle-tier delivering value, but performing well below the top tier, and a large group of bottom-quartile performers that add limited value. For procurement leaders focused on becoming top-tier performers and adding significant value to their organisations, we suggest the following approach.

Work smart, not hard

There has been an organisation-wide push toward productivity improvement by businesses, especially by harnessing the power of technological advancements. Procurement functions should be looking at this as a great opportunity.

Historically, procurement has focused on the smaller 2000 suppliers since this is the area of least resistance. In productivity terms, this is like the tail wagging the dog, rather than the other way around. With resources squeezed, procurement leaders are now irrevocably turning to the top 20 suppliers, rather than the complete 2000, because these are the mega vendor agreements that can affect the organisation the most, and where the most value can be added if managed effectively.

Meanwhile, technological advancements (like RPA) are now enabling automation of the large volumes of transactional activity that goes on in procurement, especially for the smaller group of suppliers, to ensure the function remains effective and productive.

If we apply the 80/20 Pareto Principle to procurement, a shift in focus to the top twenty suppliers, nurturing those relationships and making them more effective, will result in better deployment of resources and so more peas – or greater results. One key thing to note is that simply switching focus to the top 20 suppliers isn’t enough, you need to nurture those relationships too, which requires a change in mindset.

Competitive to collaborative

When you change from seeing your top suppliers as competitors to enablers, how you negotiate with them will change dramatically.

When you move into the top 20 suppliers, you are dealing with strategic categories which if led and managed well can make a significant impact on the business. The challenge for procurement leaders is that the relationship status with these suppliers is often complicated.

For example, in the telco world, Cisco is a supplier to every telco’s network, they are also a sell-through partner, and a competitor for the sell-through business.

Which is why it’s very surprising that all too often procurement brings a toolbox – for example RFP, vendor management, basic category management etc – to the negotiating table. This industrialisation of the procurement process is useful for the tail end – those 2000 suppliers with low resistance – but it cannot be used for the top 20 suppliers who have the potential to impact your business and your role in such a way.

The tools to handle these special relationships put better collaboration and engagement of vendor partners at the forefront of the strategy:

Top-to-top engagement: The biggest critical differentiator for the collaborative sourcing approach is top-to-top engagement between the company and the partners – that enables proactive involvement of the c-suite. This can help establish the right leverage and also enable internal visibility.

Business led: A high degree of involvement from the business owners will further align procurement’s interests with the business challenges and opportunities. This requires great communication and trust between functions and top-line management.

Strategic alignment: Procurement functions should start with an open mindset, rather than spell out all the asks at the start. All too often, the cookie cutter approach takes over, which doesn’t deliver the right long-term solutions. This will help deliver tailor-made solutions based on vendor insights.

Collaborative solutioning: Procurement departments should adopt transparent and collaborative solutions. They should conduct design and immersion workshops with partners, to take them along on the journey.

Involved facilitation by procurement: Finally, they should drive proactive governance and risk management.

Procurement leaders are best placed to play the Lead Orchestrator role to this new way of thinking about the top 20 vendors. For those procurement leaders who are aiming to become a sustainable source of value for the business, the top 20 approach is smarter, more productive and gets better results for your function and for your position in the business.

The first step is changing your culture and mindset towards the top 20 from competitive, to collaborative; from contracting, to partnering – and this is often the hardest!

So you think you’re some kind of procurement genius? In this day and age, there ain’t no such thing and that’s ok!

We all like to think we’re geniuses, that we can single-handedly solve all the procurement problems of the world.

We now know that the concept of the ‘solo genius’ is largely a myth. True creativity comes from collaborative partnerships such as Jobs and Wozniak, Lennon and McCartney, or the Wright Brothers. Even the most famous ‘solo’ geniuses – Einstein, Newton, Mozart – didn’t operate in a vacuum, but built upon the work of countless others. Today, we’re lucky to live in a world where all the answers and ideas we need are only a click away.

Let’s face it, procurement’s most pressing issues (slavery, child labour, unsafe work practices, exploitation, neglect for the environment and copyright) are too big for any one person, or even any one company, to solve alone.

Even at the best of times, working in procurement can be a lonely place, even when we’re working as part of a team. You might be the only person managing your category in your company, in your industry, maybe even in your whole country!

Clambering out of Einstein’s basement

If you have a problem that you can’t fix and need some breakthrough thinking, don’t be like Einstein and barricade yourself in a basement waiting for genius to strike.

Remember that you are part of a vast, virtual, global procurement team full of millions of talented professionals with ideas – help is only a click away.

Get yourself out of isolation, onto the global playing field and ask the universe for inspiration.

Solving the world’s problems, together.

Over five thousand Procurious members visit our discussion board every month to share ideas and offer advice to their peers. Our blogs spark debate, with members feeding their own commentary and ideas into the global community.

We are still seeing the ripple effects of these events with high levels of member engagement and interaction within the community; the feeding back of vital intelligence on alternate sourcing, suppliers, freight, logistics, on-the-ground contacts and changing regulations.

The hurried and helpful responses to these challenges by the global procurious community has proven that many hands make light work of disruption.

It’s clear that we want to talk online about the issues affecting procurement and are keen to help each other. It would seem that global “team procurement” is alive and well – but are you part of the flow?

Leveraging the Power of 23,000

There are now 23,000 Procurious members across 145+ countries, all with different strengths, weaknesses and experiences. Somewhere, out there, is someone who has had the same experience as you and some wise words to share.

Leveraging the wisdom of the crowd is the beauty of social media. By building your online presence and contacts you can craft a network of thought-leaders, influencers, and experts around you, to provide fantastic ideas and insights.

Even if you have a truly unique problem, there will be someone who can provide a fresh perspective that creates a lightbulb moment for you.

Take the lead

As a successful leader, you don’t have to have all the answers – but you do need to have the best questions….and know who to ask for the answers!

Whichever business icon or “genius” you admire – whether it be Steve Jobs, Richard Branson, Elon Musk………you know they are not the only person providing the brain power to conjure their vision, there are teams working day and night to deliver the dream.

Like me, you’re probably “blown away” (pardon the pun) by the rapid progress of the SpaceX program. But as you admire Elon’s vision, just remember this is not solo genius, no one talented employee finding all the answers – there have been thousands of people working over decades to get these game-changing rockets to the launch pad who have been collaborating globally online to solve a millions of small and large challenges on the journey to space.

It’s exactly the same story in procurement. Behind every apparent genius (aka Global CPO), there’s a team of procurement pros behind the scene helping come up with solutions. Even if you don’t have a real team helping you – you have a secret weapon – you can consult your global team of procurement buddies to help you find the answer.

Be the smartest guy in the room

To shockproof our profession and become the smartest guys in the room, we need to move out of our silos and work together.

Procurement needs to be ahead of the curve – to be agile, to be savvy and to be bold. We are the avengers, the rock stars, the movers and shakers negotiating the deals that guarantee supply, quality, cost, ethics and sustainability. But we can’t do it on our own.

When you’re next faced with a challenge or struggling with the beginnings of a great idea. Don’t just sit there. Do Something. Get online and ask questions. The answer is only a click away.

One thing you hear at every procurement event is how hard it is to really achieve indirect savings and bring them to the bottom line. Then the discussion inevitably moves to how finance and business heads just don’t understand the real value impact of the procurement team.

If you could fix this, all would be solved. However, this completely misses changes that procurement itself needs to address first.

While leading a major transformation of a large global indirect team, I was completely surprised by two blockers of a talented and motivated team. While they loved tough, numbers-focused supplier negotiations, there were two hidden fears about numbers that jeopardised their capturing savings.

1. Fear of Using the Language of Finance

The team’s comfort zone for numbers was in spend analysis, supplier pricing, total cost of ownership and benefits from a given negotiation. However, many had bad experiences with finance and business heads who were not interested in cost avoidance and best-negotiated prices, making the procurement group feel unappreciated, misunderstood and not part of the team.

There was immense cost pressure, and through the CFO and other senior leaders, this translated into a drive for year-over-year savings that could be translated into budget reductions. As the leader, I thought this was reasonable and went back to the team explaining that the measure of our performance from now on would be hard savings.

But two issues became clear immediately:

The team’s lack of basic financial acumen and the ability to understand and speak about numbers in the same way as the finance colleagues.

Their resulting discomfort and fear of not looking knowledgeable.

The journey to addressing this gap started with working together with finance to define the company’s accepted savings definitions. This handbook became the bible for all of the savings and budget reductions. It was also:

A training tool for procurement, finance and the business clients.

A way to take out the emotion and bad feelings via clear rules and definitions.

Learning by doing was a key part of the change process for the team. With regular and granular numbers reviews, the team had day-to-day opportunities to become familiar with the calculations and fluent in financial language and concepts.

This led to greater confidence in speaking with colleagues and became the new common language of how procurement contributed to the bottom line.

2. Fear of Committing to Accurate Numbers

Although procurement people will tell you that they like being measured on the numbers, what they also often say is ‘it’s better to under commit and over-deliver’. Unfortunately, what this really means is, ‘I can’t predict my performance so I will low-ball my guesstimate’.

This fear of not meeting targets was going to be even more problematic with the sharper focus on year-over-year targets. But it had to be urgently addressed:

As savings were being directly linked to and partly taken out of budget up front, being very accurate was an imperative.

While it is less bad than under-delivering, over-delivering in November usually means the money has already been spent on something else.

Over optimistically, I thought it was just a matter of explaining why accuracy was so important, and using a sales pipeline approach to enable it all. But as we got into the details, a few things became clear:

There was a lack of understanding (back to the topic of financial language) of how to organise projects at a ‘material’ level.

The team wasn’t used to thinking about their projects in terms of a pipeline over a longer horizon.

Addressing the Gap

The key to addressing the gap was again to improve the collaboration with finance as well as commit to senior management to deliver against the planned pipeline of projects. In turn, team and individual targets were set accordingly and we got two benefits from this effort.

Creating the pipeline got procurement involved in the business discussions much earlier than previously

The team learned how to set up a clear and material set of projects which reinforced their new financial knowledge

At the end of the first year, and for the very first time, the team got recognition from all sides. They felt new confidence in speaking about numbers and the increase in visibility from ‘real’ savings based on the clear pipeline. They couldn’t conceive of going back to the days of estimated benefits, fuzzy savings calculations and unclear targets.

Implementing both the formal processes between procurement and finance as well as the needed change management for the procurement team need to be fit for purpose to how the company really works. It might be as simple as agreeing the basic savings definitions or as complex as introducing a full workflow supported process.

Conquering these fears is worth the financial results!

Pauline King is the founder of Rapid Results Procurement focused on working with a company’s existing team to deliver tangible financial results. She is a recognised expert in indirect procurement with deep operational experience in procurement transformation. Pauline also works closely with The Beyond Group AG where she heads up the Indirect Procurement Practice.

“This is everything I know, folks” – Former President and CEO of Ford, Alan Mulally, shares the sum of his knowledge in one slide at ISM2016.

ISM’s keynote speaker Alan Mulally has one of those CVs that’s exhausting just to listen to. Alongside his nine-year stint as President and CEO of Ford, he served as Executive Vice President of Boeing, and CEO of Boeing Commercial Airplanes.

He was named to the Google board of directors in July 2014, served on President Obama’s US Export Council, and the advisory board of NASA.

He was named in Fortune’s 50 Greatest Leaders list, voted one of Time Magazine’s 100 most influential people in 2009, and voted 2011 CEO of the Year by Chief Executive magazine. Mulally is also a fellow of the UK’s Royal Academy of Engineering.

One Slide to Say it All

“If it isn’t a Boeing, you shouldn’t be going”, says Mulally. He worked at Boeing for no less than 37 years, notably as a chief engineer for the avionics and flight management systems for a number of major Boeing projects, including the 747 and 777. As CEO of Boeing Commercial, he launched the 787, and was at Boeing during the 9/11 attacks, horrified to see a commercial airplane being used as a weapon.

Boeing was shaken to its core by the event, with production dropping from 620 planes a year to 280. “Not many companies can sustain a loss like that and remain viable”, says Mulally. Eventually, Boeing returned as the number one avionics organisation in the world.

The average airplane has about four million parts, and at the height of a new project, you might have over one million people working on the design. This is where Mulally learned how to develop a skilled and motivated team, and his principles and practices around working together led him to success after success at both Boeing and Ford.

Mulally brings up a one-page chart with 11 bullet points. “This is everything I know, folks”, he tells the audience, and he means it. Whenever an audience member asks a question, he brings this chart back up on screen, selects the relevant point, and talks to it. Here’s the list in full:

Everyone knows the plan, the status and areas that need special attention

Propose a plan, positive, “find a way” attitude

Respect, listen, help, and appreciate each other

Emotional resilience – trust the process

Have fun – enjoy the journey and each other.

Making sure “everyone knows the plan” is achieved through colour-coded project charts. “Every Thursday morning, we’d link up everyone around the world and colour-code the charts”, Mulally says. “Red means we’ve identified a problem – which is great – and we’re working on it.”

Ford Motors Turnaround

Mulally took these colour-coded charts over to Ford when he took on the role of CEO at the behest of Bill Ford, grandson of Henry. There he found a very different culture, and at first, people didn’t “get” the colour coding. “We had about 320 different charts”,

Mulally says, “I explained the coding, and the business leaders went away and had their charts colour coded. At the following meeting, I was surprised to see chart after chart all colour-coded green”.

The organisation was forecast to lose 17 billion that year, yet there wasn’t any red or yellow to be seen. The problem, Mulally discovered, was a culture in which business leaders would hide problems, making issues disappear rather than highlighting them as opportunities.

When a leader named Mark Fields was finally brave enough to place some red on his chart (due to a major production issue), Mulally responded by clapping in the leadership meeting. “People were looking at me, looking at Mark, waiting for him to be fired”, he says. “They thought the clapping was a signal for some bouncers to come in and remove Mark from the room!”

But Fields wasn’t fired. Instead, Mulally treated the production issue as a rallying point, showing Ford’s business leaders how to come together to figure out the problem, and also demonstrating that he valued Mark’s honesty by seating him next to the CEO at each subsequent meeting. Mark’s charts went from red, to yellow, to green.

And the following week? 320 beautiful, rainbow charts.

Deep Trouble

When Mulally took over at Ford, the company was in deep trouble with the aforementioned $17 billion loss in 2009. Ford was sized for 26 per cent market share in the US, but only had 16 per cent, losing money on every brand and vehicle. Mulally responded by focusing on the Ford brand over all others and consolidating the nameplates down from 97 to 15.

In 2006, Mulally led the effort for Ford to borrow $23.6 billion, mortgaging all of Ford’s assets to overhaul the company and protect it from recession. This decision meant that Ford was the only company of the “Detroit Three” (Ford, GM and Chrysler) that did not have to take a government loan during the automotive industry crisis of 2008–9.

Value of Procurement

Mulally recognised the enormous value of procurement, especially in his aggressive cost-cutting endeavours. He promoted procurement to a leadership position within the company – something which had never been done at Ford – and ensured all of the business units around the world were working together with procurement.

Suppliers were also a major part of Mulally’s turnaround, and Ford rose from a position of second-last preferred customer, to number three today.

Today, Ford is the number one brand in the US, and the fastest-growing car manufacturer globally. It builds the first, third and sixth best-selling vehicles in the world presently. Mulally attributes this success to his eleven-point slide – in the end, it’s all about building the right culture and motivating your people.

Tania Seary tells delegates at the Asia-Pacific CPO Forum that procurement needs to get social to drive the profession forward.

Procurement professionals need to claim their rightful place on the Internet, and get social, by actively participating in social media and blogs for the benefit of the broader industry, the founder of Procurious told a conference in Melbourne yesterday.

Tania Seary, who founded Procurious to connect, promote and support procurement professionals across the globe, told the 9th Asia-Pacific CPO Forum that online visibility has several benefits, but that it’s everyone’s responsibility.

Large portions of the procurement profession are working in isolation, unaware that there is a whole universe of knowledge available to help them do their jobs better and learn, Seary told the audience.

In fact, there are more than 2.5 million procurement professionals in the world, but probably less than 500,000 that the industry can readily connect with, she says.

Share, Share, Share

Procurious was launched two years ago as the world’s first online business community dedicated to procurement and supply chain professionals.

This can start by simply sharing your social media profile, your business photo, and by broadcasting your everyday successes.

“Think about what it would mean if a newly-minted company CEO who wants to understand what we do, takes the time to Google ‘procurement’ and sees overwhelmingly positive language in their search results. That CEO can’t help but be inspired and energised by the hype and positivity around procurement,” Seary says.

She also urged all procurement professionals to ask questions and share what they don’t know, saying that without sharing the things you’re concerned about, no action can be built, and there can be no moving forward. Giving back to enrich the wider community, by understanding that everyone has something valuable to share is important too, she says.

Big Ideas 2016

The highlights of Procurious’ Big Ideas Summit, held last month in London, were also shared to the 50-strong audience of procurement leaders. Keynote speakers included IBM, Coupa, ISM, Facebook and The Economist.

“What happened in the conference in London was only a small part of the story. What makes Big Ideas truly unique is that it is a digital conference that is amplified to procurement professionals around the globe.”

For example, the #BigIdeas2016 hashtag was tweeted 1,500 times, reaching a potential audience of 4.3 million individuals, all around the world, in just over 24 hours.

“Let me tell you that the message in the room was clear. Procurement needs to think the unthinkable and certainly rethink the possible,” she told the audience.

The UK is now auditing Supply Chain Purity in the fight against slavery, while Social Procurement is on the agenda in Australia.

Get Social Enterprises on Board

Social Enterprise UK CEO, Peter Holbrook, announced at the Big Ideas Summit the ‘Buy Social Corporate Challenge‘, which will see a group of high profile businesses aim to spent £1 billion with social enterprises by 2020.

The founding partners include heavy hitters like Johnson & Johnson, PwC and Zurich.

J&J are taking action and supporting people often termed ‘furthest from employment’, with the ‘Social Impact through Procurement‘ initiative aiming to create at least 150 jobs for these people by 2020.

“Here in Australia, Social Procurement has been a concept we have been talking about, trialling, but the big ideas summit confirmed that this is now firmly on all major corporation’s agenda.

“Not only is this the right thing to do, but this is the sort of thing that the C-level, annual reports and what Procurement could be famous for. So where are we with Social Procurement in Australia? I will be interested to hear.”

From talent management, to ethics and transparency, there are some major challenges facing procurement in the current environment. But which is the biggest challenge?

When considering the potential issues and risks that procurement professionals need to be aware of in their day to day work, it’s difficult to single out one in particular requiring greater focus than the rest.

In fact, if you were to ask the question of what is the biggest challenge currently facing procurement, the chances are high that you would get a considerable number of topics listed. However, that is exactly what Deltabid did with a survey of over 500 procurement professionals. More on this shortly.

Blind Spots

During the Big Ideas Summit 2016, Procurious asked its delegates to tell us what they considered to be procurement’s blind spots, and major areas of risk, in the coming years. Our panel of experts highlighted these areas:

Too great a focus on savings

Dealing with the wider business

Talent attraction and management

A lack of ambition in procurement

Working with legal teams

A contributor to the Procurement Leaders blog commented that, “CPOs face one of the most complex roles in an organisation”, and highlighted skills required for the future including a focus on strategic relationships, management of global supply chain risk and use of big data.

At the 9th Annual Asia-Pacific CPO Forum, The Faculty will be discussing the need for procurement to leverage supplier-enabled innovation, and a focus for procurement on SRM in order to make this a reality.

And when you consider the prevalence of stories and news reports on sustainability and supply chain transparency, it seems we are reaching a point where not only can we not reach a consensus on what the biggest challenge is, but also facing a lack of understanding about how we tackle these challenges.

Making Progress?

The other issue to consider is whether or not the procurement profession is making progress dealing with its biggest challenges. A quick search reveals a number of articles from the past couple of years asking a similar question of procurement leaders, including this one from Spend Matters.

In it, the top 5 challenges for CPOs are highlighted, including mitigating spend creep, the visibility of realised savings, compliance, technology, and procurement skills and capabilities to deliver on strategies. Starting to sound familiar?

What procurement must do is set out to tackle these challenges, and actually make some progress on them, instead of moving on to the next thing. And also to realise that these challenges don’t go away – it’s going to be a continuous process.

Biggest Challenge

This circles back to being able to identify the biggest challenge facing the profession, and perhaps assessing an order for them to be in, and a plan of attack for meeting them head on. This is where Deltabid’s research can help.

A survey of over 500 procurement professionals found that the biggest challenge was supplier-related issues, including finding and qualifying suppliers and maintaining consistent supply, with strategy selection, and cost reduction making up the top three. You can see the full results in the infographic below:

While the results may not be surprising, they go some way to helping generate a consensus on the biggest challenge facing procurement. It’s now down to the profession as a collective entity to work out the best way to tackle these challenges.

One of the best ways of doing this is by collaborating openly, sharing knowledge, information, and lessons learned, and flexing our collective muscle in order to change the profession for the better.

If you have any comments, ideas, thoughts, or anything else you would like to share, please let us know in the comments below. If you have also had successes in dealing with any of these challenges, then we would love to tell your story!

In our online world, where knowledge and information is at the touch of a button, it pays to share. And it’s time for procurement to share in order to demonstrate the value it brings to the organisation.

Sometimes the biggest and best ideas are the simplest ones. Whether it’s a new way of looking at an old problem, or just showing others how to take the first of many steps, the simplest ideas often have the power to cut through the noise and change the way people think.

This is my big, simple idea: the procurement profession needs to share.

Have you ever looked into how Google works? The search engine performs approximately 100 billion searches per month through over 60 trillion individual pages. Google navigates the web by ‘crawling’, or following links from page to page, sorting the pages and keeping track of it all in the 100-million-gigabyte ‘index’. As you search, algorithms work in the background to understand what you want and pull relevant documents from the index.

Results are then ranked using over 200 factors, including site quality, spam removal, freshness and user context – all in 1/8th of a second. Google is becoming incredibly sophisticated, taking keywords into account as part of a wider interpretation of the data on your website, to form its own conclusion about what your site actually delivers.

Language Matters

I found this out, predictably, through a Google search. My point is that as the amount of web content and chatter about procurement grows exponentially all over the world, we need to keep in mind that the language we use matters.

The profession has to optimise the picture that is being painted about procurement because the more positive words and imagery that are put out there, the more we will be discovered and our value understood.

The good news is that influential advocates for the profession are doing exactly that – in the past 48 hours we’ve had positive keywords and phrases used to describe procurement (here on Procurious and elsewhere) including:

Avenger

Rock-star

Thinking the unthinkable

Millennial-led disruption

Leadership in the digital age

Unleash the superhero

Procurement evolution

Changing the business model

Collaborating to inspire

Think about what would mean when a newly-minted CEO, who wants to understand what we do, takes the time to Google ‘Procurement’ and sees overwhelmingly positive language like this in their search results. That CEO can’t help but be inspired and energised by the hype and positivity around procurement.

Forget re-branding – focus on reinforcing the value of procurement

There’s been some discussion recently about re-branding procurement, abandoning the title of CPO and adopting language such as ‘Commercial Operations Director’, or even ‘Chief Relationship Officer’. Further down the chain, only one-third of 99 different job titles used by procurement professionals include the term “procurement”.

In my opinion, re-branding procurement is a distraction, especially since we’ve made enormous progress in educating businesses about what procurement does. Rather than having to re-educate the C-Suite about what a Commercial Director or Chief Relationship Officer does, that energy could be better spent actually showing people what we have and can achieve.

In line with why we created Procurious to begin with, we know that the procurement and supply chain profession has struggled to overcome outdated stereotypes, so it’s time we join forces to become collectively valued. By empowering future procurement leaders, we can change the face of the profession from the inside out, rather than worrying about the label itself.

Share, share, SHARE!

Procurious Founder Tania Seary shares her Big Idea for 2016

Modern wisdom has it that if you don’t exist on Google, you don’t exist at all. If we can’t collectively raise our voice and optimise procurement through positivity, then there is a real danger that the CPO role will become increasingly irrelevant and, eventually, forgotten.

So, how do we go about it? Through constant positive reinforcement. The more positive stories, photographs and other uplifting imagery out there, the more it will help us. Specifically, you can:

Ask questions and share what you don’t know – without sharing the things we’re concerned about, there can be no action built and no moving forward.

Give knowledge back to enrich the wider community – everyone has something valuable to share.

Share your vision for the profession, and most importantly, your big ideas.

Let’s stick with the label we’ve got and continue to build upon it, because the momentum is with us as a profession. Remember, the more we flex our collective muscle, the stronger we become. My call to action to all you avengers, rock-stars and superheroes out there is to get behind one word – and that word is “procurement”.

Charting the stratospheric rise of Slack, and investigating how it can be used to increase collaboration and conversation in procurement.

For those who don’t know, Slack is an online communication tool, built around both group and a one-to-one chat. But it’s much more than that. Unlike any other system, Slack can talk to pretty much any other tool through the magic of APIs and webhooks.

These integrations make it a mind-numbingly powerful tool, because it becomes a platform for pretty much anything you need, and can be the focal point of many aspects of your business.

It drastically reduces the number of systems you need to consult to get the information you need to do your job. If something is noteworthy, it should be pushed to Slack.

This incredible value has allowed Slack to grow very fast. We don’t have any startup in our surroundings who doesn’t use it. But it is also increasingly used in larger organisations, for example, NASA, Dow Jones and Salesforce. Plus, all the major news outlets talk about it or even use it.

Their progress is staggering. After less than 2 years there are more than 2 millions active users of Slack globally. And it’s only the beginning.

Does Procurement really need it?

Does Procurement need to collaborate or be more nimble? Can it use Slack as part of its digital transformation?

Yes, of course! And here’s why:

1. Collaborate, Collaborate, Collaborate

With your team, your stakeholders and your suppliers. It’s easy to create topical channels and invite people to join them. Even if they are outside of the company.

Imagine: you no longer have to ask IT to create a dedicated section on the intranet, or setup a “secure room” to exchange documents. Slack can host everything from documents to discussions, and it’s available for anyone with access to the channel. It’s the end of information trapped in someone’s mailbox.

That’s how you’ll get smooth collaboration with your stakeholders or your suppliers.

2. Make Life Easier by Knowing What Happens Everywhere

Slack has this incredible ability to integrate easily with pretty much anything.

Twitter, Dropbox, Google Docs, or anything that can respond to a URL, can be integrated with Slack. This means that when something noteworthy happens, you get a notification in Slack and not cluttering your inbox. One more step towards inbox zero!

And a new range of Procurement tools can also be integrated and send notifications to inform you about new purchase orders or new negotiation projects.

Soon, the days of email notifications and logging into 5 different systems to know if something has happened, will be gone.

3. Kill (internal) emails

This is probably the last step towards inbox zero. We have set a rule in our company that basically says, “if there is no recipient outside of the company, then don’t send an email. Use Slack instead”.

You have no idea how much this reduces the number of emails we receive on a daily basis. If the information is meant to be shared with one person only, you can use the direct messages, otherwise, it can be posted in a relevant channel. Easy!

The Per Angusta Team’s Slack Channel

4. Towards “Conversational Procurement”?

Recently, there has been a lot of talk about the concept of conversational procurement. In essence, people in your company would no longer visit your e-Procurement tool to buy things, but would instead talk to an automated system that would understand their needs, gather relevant information and run the process of validating and ordering.

Think of it as Procurement meets Siri, or Google Now if you’re an Android person (or Cortana if you’re…oh wait no-one is a Windows Phone person…).

And that’s exactly what bots are in Slack. An interface for the user to interact with a system in a loosely structured way. Of course, this would mean that a system in the background would have to understand your request, but at least the user-facing part is taken care of.

5. Have Some Fun

Besides all the serious things you can do in Slack, there is also the #random channel, which acts as a sort of virtual water cooler, a place to just relax and post some funny stuff.

Again, the fact that Slack is so easily integrated with a number of services will let you post nice animated gifs everywhere.

So what are you going to do next?

We suggest you register with Slack and create a room (or possibly talk to IT first…). Don’t worry, it’s free, and you will only start paying if you have more than 10 integrations. And if you reach that point, then it probably means that you will be happy to pay for the service.

Just be aware that Procurement and Digital Procurement are already taken!